The Impact of Mergers and Acquisitions on Financial Performance of Listed Companies in China

Chen, Yadong; Lok, Char Lee; Phua, Lian Kee; Quah, Kenny Wei Jie

doi:10.35631/ijemp.28001

Cited by 8 publications

(10 citation statements)

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“…Our evidence supports the view that M&A can improve the operating performance of companies. In the domestic Russian M&A market, the operating profit margin of companies improves after horizontal deals between large companies, in line with previous research of other M&A markets ( [15], [16], [17], [21]). However, in Russia, unlike many other countries (see [13]), real GDP growth does not impact the size of the national M&A market in value terms or the operating profit margin of companies after deals.…”

Section: Discussionsupporting

confidence: 89%

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The Impact of Domestic Mergers and Acquisitions on the Operating Profit Margins of Companies in Russia

Mikhalchuk¹

2020

КФ

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This research paper studies the impact of domestic Russian mergers and acquisitions on the operating profit margin of companies participating in deals. The goal of the research is to evaluate the changes in operating profit margin, and to analyse the significance of factors affecting operating profit margin after deals have been concluded. The main scientific contribution of this research is the development of a methodology to analyse the effect of mergers and acquisitions on operating profit margins that takes into account the idiosyncratic features of the Russian market, and which can be used with limited information for analysis of private companies. The proposed methodology is based on benchmarking the operating profit margin of companies participating in a deal against the same variable for a portfolio of similar companies. Based on the analysis of recent studies, several explanatory variables were proposed to explain the changes in operating profit margin after the deal. Among these were included real GDP growth, type and value of the deal, book value of assets of the target company, as well as a number of control variables. A random effects model with robust standard errors was used to test the significance of factors affecting operating profit margin. This methodology was applied to a sample of 73 domestic Russian deals observed in the period 2012-2019. This research makes several practical contributions to the literature. In the studied sample, deals lead to an increase of operating profit margin by 4.6% relative to the period before the deal, and 2.5% relative to the benchmark portfolio. The highest growth of operating profit margin relative to the benchmark portfolio is observed 2 years after the deal. This growth is increased by the purchase of large companies in the same industry. There is a significant negative effect of the deal value and a strong indication that buyers tend to overpay for the target companies relative to their fair value. This research will be of practical use for persons in management positions to estimate the value of prospective deals, and for academic researchers interested in the analysis of mergers and acquisitions in emerging markets.

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Section: Discussionsupporting

confidence: 89%

“…Studies show that horizontal deals are more likely to increase operating profit margin. The research at [15], on a sample of 90 French listed companies M&A, and [16] on a sample of 434 Chinese M&A, both concluded that horizontal M&A lead to a cost reduction via economies of scale.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Domestic Mergers and Acquisitions on the Operating Profit Margins of Companies in Russia

Mikhalchuk¹

2020

КФ

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“…On the other hand, a positive link between M&A and financial performance post-merger has also been discovered (e.g. Herwadkar et al, 2022;Chen et al, 2019) and it is linked to other measures of the financial performance of a merged company. Aggarwal and Garg (2019) observed a significant positive impact on the profitability and liquidity position of acquires five years after the merger.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

The Profitability of Legal Mergers in Times of Economic Crisis – A Polish Example

Janowicz

2023

Folia Oeconomica Stetinensia

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Research background Recent years have brought a serious economic crisis, first caused by the COVID-19 pandemic and later worsened by the Russian invasion of Ukraine. The global economy was greatly affected by these events, so it can be expected to see them affect the post-merger financial performance of companies. Purpose The aim of the paper is to examine if the pandemic and the Russian invasion of Ukraine had any effect on the financial performance of combined companies during these events in comparison to merged companies for which the 3-year post-merger period ended in 2019. Research methodology The research methods used involve a critical literature analysis and statistical tests. This study analyses the financial ratios of Polish public companies which participated in legal mergers which were finalised between 2016 and 2018. For each company necessary ROA ratios were calculated (pre-merger ROA ratio, ROA ratio for the 3rd year after the merger). The data was grouped according to the year of the merger and then compared to test the hypotheses. Results There was no statistically significant difference in the distribution of profitability ratios for the analysed companies before and during the crisis. However, there is evidence that there was a statistically significant increase in profitability ratios pre- and post-merger for legal mergers finalised in 2017. Novelty The paper provides an initial insight into how the latest economic crisis affected the financial performance of Polish public companies after a legal merger.

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“…Penelitian sebelumnya oleh (Ombaka dan Jagongo, 2018) dan (Chen et al, 2019) menuturkan bahwa terdapat perbedaan signikan terhadap rasio profitabilitas dengan proksi return on assets pada perusahaan yang melakukan akuisisi. Sebaliknya penelitian oleh (Hachem dan Sujud, 2018) dan (Firdaus & Dara, 2020) menyatakan tidak terdapat perbedaan signifikan.…”

Section: Gambar 3 Survei Kpmg Merger Dan Akuisisiunclassified

Analisis Kinerja Keuangan Perusahaan Sebelum dan Sesudah Akuisisi pada Perusahaan yang Terdaftar di BEI

Purnomo,

Nurmatias

2024

IKRAITH-EKONOMIKA

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Penelitian ini bertujuan untuk melihat perbedaan kinerja keuangan perusahaan sebelum dan sesudah akuisisi.Sampel yang digunakan yaitu perusahaan yang terdaftar di Bursa Efek Indonesia dan melakukan akuisisi padatahun 2017-2021 dengan total sampel sebanyak 48 perusahaan dengan melihat kinerja keuangan satu tahunsebelum dan satu tahun sesudah akuisisi. Teknik Pengambilan sampel digunakan dengan purposive sampling.Variabel yang diteliti diantaranya rasio likuiditas (Current Ratio), aktivitas (Total Asset Turnover), solvabilitas(Long Term Debt Equity Ratio), dan profitabilitas (Return On Assets). Teknik analisis yang digunakan yaitu ujiWilcoxon Signed-Ranks Test. Hasil penelitian menunjukan tidak terdapat perbedaan signifikan pada keempat rasioyang diteliti yakni rasio likuiditas, aktivitas, solvabilitas, dan profitabilitas sebelum dan sesudah akuisisi. Kata Kunci : Akuisisi, Kinerja Keuangan, Rasio Keuangan

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The Impact of Mergers and Acquisitions on Financial Performance of Listed Companies in China

Cited by 8 publications

References 0 publications

The Impact of Domestic Mergers and Acquisitions on the Operating Profit Margins of Companies in Russia

The Impact of Domestic Mergers and Acquisitions on the Operating Profit Margins of Companies in Russia

The Profitability of Legal Mergers in Times of Economic Crisis – A Polish Example

Analisis Kinerja Keuangan Perusahaan Sebelum dan Sesudah Akuisisi pada Perusahaan yang Terdaftar di BEI

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